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When an individual or a company purposefully underpays its taxes, it is called tax evasion. In this article, we will discuss tax evasion and give examples of ways people evade taxes such as that of Myles Haverluck and his company Dauphin Clinic Pharmacy in a bid to help you avoid them in the future.How Taxes are calculated

The tax code might be complicated, but the general tax procedures are fairly simple. It is a legal requirement that every American citizen files a tax return every year. When filing these returns, they are supposed to state what their expenses were, how much they made, and the size of their families. From the returns, the IRS calculates the total income of each family and then subtracts deductions; therefore, determining the taxes owed and adjusted gross income (AGI).

After determining the AGI and the taxes owed by each family, the IRS then looks to see if there were any special circumstances that would qualify you to pay less tax. If there are, then the IRS reduces the amount of taxes owed by your family by applying credits. These credits are then used by Congress to motivate people to adjust their way of life. For instance, credits may be provided to homeowners who make substantial improvements in their properties such as making them energy efficient in order to encourage more people to do it.What is Considered Tax Fraud?

Not all mistakes are considered tax fraud. Because the Internal Revenue Code is complicated, and tax forms long, you are bound to make some mistakes when filing your returns. These mistakes may result in underpaying taxes. Though it is important to try and fill your forms as correctly as possible, you do not have to worry about a conviction for tax evasion for a simple mistake. To be convicted, the IRS will have to prove beyond any reasonable doubt that you tried to underpay your taxes deliberately. If the underpayment was as a result of a simple error, you will be required to pay what you should have paid, and in some cases, a fine.Examples of Tax Evasion

There are many examples of tax evasion. This is because the whole process of taxation is vulnerable to tax fraud. A common type of tax evasion is underreporting income. A famous example of underreporting income is that of Dauphin Clinic Pharmacy. One of this pharmacy’s directors, Myles Haverluck was fined $77,000 in 2013 for evading income tax.